Eurozone interest rates won't go to zero
European Central Bank president Jean-Claude Trichet said Saturday
that interest rates in the eurozone would not be reduced to zero and
rejected suggestions of a rift at the bank.
"This zero rate policy would not be appropriate in our own case," he
told a news conference in Tokyo.
The ECB earlier this month lowered its key lending rate by a quarter
point to a record low 1.25 percent and Trichet said at the time that a
further "measured" reduction was possible.
The US and Japanese central banks have lowered their main lending
rates to virtually zero, while the Bank of England has slashed official
borrowing costs to a record-low 0.5 percent to fight a deepening
recession.
The ECB has disappointed some investors who wanted deeper interest
rate cuts to revive the ailing eurozone economies Trichet reiterated
that the ECB would unveil new unorthodox measures to tackle the economic
downturn when its governing council meets next month."We have a
rendezvous May 7 and we will decide on further non-standard measures,"
he said.The ECB chief noted that the bank had already adopted new tools
such as providing commercial banks with unlimited amounts of cash at
fixed interest rates.
AFP
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